Illustrating a changing tide in the SVOD distribution business, pay-TV programmer Epix has shifted on-demand streaming of its content from Netflix to Hulu.
World War Z is leaving Netflix for Hulu.
Co-owned by Lionsgate, MGM and Paramount, Epix supplies movies including The Hunger Games and World War Z to SVOD services 90 days after their run in the pay-TV window starts.
Netflix said it's not renewing its Epix deal because it wants to shift its content acquisition resources into original production.
"While many of these movies are popular, they are also widely available on cable and other subscription platforms at the same time as they are on Netflix and subject to the same drawn out licensing periods," said Netflix Chief Content Officer Ted Sorandos in a company blog post. "Through our original films and some innovative licensing arrangements with the movie studios, we are aiming to build a better movie experience for you."
Under the leadership of CEO Mike Hopkins, Hulu began last year to significantly increase its level of spending on content acquisition, mostly to keep up with market leader Netflix. Hulu content chief Craig Erwich called the Epix pact "a landmark deal for Hulu" that "marks a huge expansion for our offering of premium programming."
While Hulu is often lumped in with its larger SVOD rival, Netflix, the company's business model has some fundamental differences. For one, it is notably owned by traditional media giants 21st Century Fox, Comcast/NBCUniversal and Disney/ABC. Programmers say its licensing terms are significantly more advantageous compared with Netflix.
The ability to keep the network brand on the show during its SVOD window is another key attraction, FX president John Landgraf told the Wall Street Journal in December.
"Ultimately, it comes down to the fact that we welcome the money paid by the subscription video on demand business, but we worry about the loss of association between our original programming and our brand," Landgraf said "We want our shows associated with our brand, and we want to be able to provide a robust non-linear experience in service to our customers."
Added Mark Greenberg, president and CEO of Epix, in a statement: "Hulu has become one of the most popular premium streaming services and Epix's agreement is evidence of their understanding of the value that our blockbuster Hollywood films, deep library of classic film titles and original programming brings to consumers."
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